Samsung sells units and announces $2 bn share buyback

The sale of its petrochemical and defence units to the Hanwha conglomerate, which has major petrochemical holdings, is expected to be finalised in the first half of next year, Samsung Group said in a statement.

The deal involves Samsung Electronics and other group affiliates selling their combined stakes in defence firm Samsung Techwin and Samsung General Chemicals.

A 50-percent stake held by Samsung General Chemicals in its joint venture with the French energy giant Total, called Samsung Total, will also be sold to Hanwha, along with Samsung Techwin’s 50-percent holding in a joint venture with French defence firm Thales.

It marks the first sale of Samsung affiliates since the group was forced to shed its struggling carmaking unit in 1997 during the Asian financial crisis.

The group, comprised of dozens of units including the flagship Samsung Electronics, earns a collective revenue equal to around 20 percent of South Korea’s annual economic output.

Samsung Techwin, a developer of security equipment and aerospace technologies, reported a net profit of 133 billion won last year, but has amassed a net loss of 14.5 billion for the first three quarter of this year.

Samsung’s restructuring has not always been smooth sailing.

Last week it had to scrap a merger between two major units — Samsung Heavy Industries and Samsung Engineering — due to the spiralling cost of buying back stock from shareholders opposed to the deal. – AFP